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1 Dee Singh-Knights, 2 Alexandria Straight, 3 Nola Wilson 1 Extension Specialist, 2 Extension Agent, 3 NESARE Outreach Leader West Virginia University.

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Presentation on theme: "1 Dee Singh-Knights, 2 Alexandria Straight, 3 Nola Wilson 1 Extension Specialist, 2 Extension Agent, 3 NESARE Outreach Leader West Virginia University."— Presentation transcript:

1 1 Dee Singh-Knights, 2 Alexandria Straight, 3 Nola Wilson 1 Extension Specialist, 2 Extension Agent, 3 NESARE Outreach Leader West Virginia University Extension Service WIA Educators Conference, Indianapolis, Indiana, April 2-3, 2014

2 Business Skills Building Financial Management Market Analysis Risk Management (Farm and Food Safety) Sustainable Production Practices Value-Adding and Direct Marketing Partnership Networking

3  $8.9 b spent on food in WV - Reducing leakages is important to sustaining local communities  Growing interest in the availability of affordable local food in West Virginia for reasons of health and supporting the local economy 39% more farmers are targeting local customers West Virginia restaurants and hotels increased purchases of local products by 360% West Virginia Department of Education this year committed $250,000 in school food funds for local purchases More than two dozens county school systems report buying directly from West Virginia farms

4  Short-course with several modules: Help limited resource producers assess feasibility, grow, process and market pastured poultry ◦ Production - Can it be done? ◦ Marketing - Can you sell it? ◦ Profitability - Will it make money? ◦ Processing - Can you process it efficiently and safely? Working H Farms, WV

5 Ritchie County Summers County Kanawha County Preston County  104 existing and aspiring small-scale poultry producers attended 1 of 4 (3-hour) workshops  Workshop covered business and feasibility planning, food safety regulations and recommendations, and production systems, nutrition and processing considerations.  Participants participated in a hands-on poultry processing demonstration session  Five sessions planned for 2014

6  Strong demand for pastured poultry exists  Potential for extra farm income/new farm income  Low capital investment required to get started  Can start small and grow  Can be run by one person  Kids can help  Provides sustainably produced meat  Chickens build soil fertility  Chickens attract customers for other products  Proposed rule change to expand on-farm processing exemptions for poultry slaughter to 20,000 birds RainbowFarmsWV.com

7  Very labor intensive--especially on-farm processing  Usually seasonal, unless the producer builds substantial housing  Limited support system of suppliers, contractors and retailers  Weather-related stress, predation, picking up diseases from wildlife are issues  Reliable processing facilities remain hard to find Working H Farms, WV WVUES Workshop

8  Production information and experience – choose production system  Requirements for ◦ Land, Water ◦ Building and facility ◦ Equipment and machinery ◦ Management and labor ◦ Supply sources for chicks, feed, equipment  Additional considerations: ◦ Supply, timing, specifications ◦ Breeds, quality and production rate ◦ Business size RainbowFarmsWV.com

9  Legal, Regulatory and Liability Issues ◦ Currently… 1000 bird limit per calendar year without inspection. Proposed increase to 20,000 in 2014 ◦ Must be slaughtered where they were raised ◦ Slaughtered under sanitary conditions; not adulterated ◦ Must be correctly labeled - add poultry exemption number ◦ Cannot cross state lines ◦ Can be distributed in-state to household consumers, restaurants, and hotels. ◦ Must keep adequate records (slaughter, sales)

10  Label Requirements – Mandatory Features ◦ Product Name ◦ Net Weight/ Unit ◦ Safe Handling Statement ◦ Address Line  Product Handling Stored, transported in a clean sanitary environment to keep products wholesome Kept solidly frozen  Permits ◦ Meat and Poultry Distributors License ($5.00) permit give the WVDA the right to inspect your freezers ◦ Food Handling Permit ($50) Bone Creek Farm 1815 Bone Creek Rd Berea, WV Whole Duck

11  Have you assessed your Market? ◦ Target market descriptions – who are your customers ◦ Marketing options – where can I sell my products ◦ Existing market demand – how many do they want, when do they want it, what exactly do they want ◦ Expected price – what can I expect to sell it for – what will customers pay ◦ Expected sales volume – how many can I sell ◦ Marketing Considerations: Farm/food safety and labelling issues, and rules/regulations for direct marketing;

12 Market Potential – Everything but the ‘Cluck’ Product SoldPrice/UnitProduct SoldPrice/Unit Whole $ 3.75Carcasses $ 1.00 Cut-Up (whole) $ 3.75Liver $ 4.50 Boneless Breast $ 8.50Hearts $ 4.50 Tenders $ 8.50Gizzard $ 4.50 Wings $ 4.00Feet $ 1.00 Leg Quarters $ 2.75Heads $ 1.00 Necks $ 1.00Manure $ 5.00 Backs $ 1.00 Average cost to process a chicken on farm was $1.15/lb. Average cost to slaughter and process a bird off farm was $1.60/lb. Highest prices: farmers’ markets (5lbs, 8 wks.), restaurants (3.5lbs, 6 wks.) Highest farm revenue – from parted-out birds Highest proportion of sales – On-farm

13 Break-Even Price per Bird Sold ◦ Price needed to cover the cost per bird Total Expenses = $1,130 Number of Birds 100 birds = $11.30/bird (minimum price) Break-Even Price per Pound Sold ◦ Price needed to cover the cost per pound sold Total Expenses = $1,130 Total Lbs. Sold 450 lbs. = $2.50/lb. sold (minimum price) Use these numbers to determine if your should go ahead with this enterprise: Can you clear this price in the market you want to sell in? Can you find another market that will clear this price?

14 ◦ $$ Capital costs – what are my start-up costs? ◦ $$ Operating costs – what are my day-to-day costs? ◦ $$ Income Statement – have I looked at the potential costs and returns? ◦ $$ Break-even analysis – cover your costs first ◦ $$ Sensitivity Analysis – have I looked at how simple changes may impact my bottom-line (Effects of changes in feed costs, finishing age, processing equipment, buildings, etc) Working H Farm, WV

15 Estimates Costs and Returns per Bird (5 Farms, 2013) Size of Farm< > 800 Farm 1Farm 2Farm 3Farm 4Farm 5 Total Revenue/Bird $ $ $ $ $ Feed Cost $ 8.44 $ $ 1.51 $ 5.27 $ 3.72 Other Var. Costs $ $ 5.64 $ 6.03 $ 3.36 $ 0.36 Annual Fixed Costs $ 5.71 $ 2.95 $ 0.69 $ 3.01 $ 1.21 Labor $ $ 7.77 $ 9.70 $ 2.87 $ 2.17 Net Returns To Labor and Management $ (14.02) $ (9.90) $ $ 1.52 $ 8.15 Net Income $ (39.62) $ (17.67) $ 6.02 $ (1.35) $ 6.03

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17 ◦ Scale-appropriate processing equipment and processes ◦ Hands-on demonstration of appropriate processing equipment, set-up and actual steps for processing & evisceration. ◦ Food Safety and GHPs considerations

18 o Curriculum and Supporting Materials available at ◦ nable-ag/sare/sustainable-ag. nable-ag/sare/sustainable-ag o Small-Scale Poultry Processing Video:  ble-ag/sare/sustainable-ag. ble-ag/sare/sustainable-ag o Cost-of-Production benchmarks (based on actual case studies in WV) o Financial Analysis Templates o Scale-appropriate processing equipment o Producer/grower Bird Limit Exemption o Food Safety o Good Manufacturing Practices o Standard Operating practices o Hazard Analysis Critical Control Points Plan o Record –Keeping o Sample Flock Record Log o Sample Slaughter Record Log o Egg Production as further income diversification

19  Profitability would depend on: ◦ Scale of operation ◦ Processing equipment used  More equipment requires large scale of operation  More equipment reduces labor cost/bird ◦ Feed cost management  Producers considering purchasing cooperatively ◦ Improvements for 2014  Include egg production for further income diversification  Include GHP, GMP in preparation for the FSMA RainbowFarmsWV.com

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